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Atlantic Capital Management Special Report: Another Perfect Storm

Tyler Durden's picture




 

Zero Hedge is happy to announce its most recent collaboration, this time with Atlantic Capital Management, whose special reports we will post in the future on a periodic basis. We start off with the September report , which is divided into three parts: Part 1 – The Economy Can Go From Bad to Worse, Part 2 - Self-Similarity (on High Frequency Trading and fractal systems), and Part 3 - The Myth of Valuations. We hope you find the report as interesting and informative as did we.

Another Perfect Storm, Caught Between Criticality and Depression, Danger Lurks (pdf)

 

 

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Wed, 09/08/2010 - 22:08 | 570886 Number 156
Number 156's picture

Awesome. Reading it now.

Im waiting for the markets to do something along these lines:

http://www.youtube.com/watch?v=ueuauKKjPZI&feature=related

Wed, 09/08/2010 - 23:11 | 570953 Rusty Shorts
Wed, 09/08/2010 - 22:21 | 570905 CPL
CPL's picture

Note graphs 1-1, 1-2 and 1-3 and where the bubble really collapsed and should have been left alone...right around 2001 june-july.  That's where we should have been for the past ten years with a proper interest rate of around 8-10%.  Instead we've opted to backlog the bomb that should have been diffused over ten years.

I'm half expecting the interest rates to pull the same shit that happened in the early 90's.  You go to bed at 6.5% and wake up to 15% the next morning.

Thu, 09/09/2010 - 09:27 | 571554 old_turk
old_turk's picture

Late 80's, into the 90's, the worm turned in 92-93 time frame.  I was running out the curve on bonds at that time.  :-) 

It was crazy but it was highly profitable.  For a long, long time.  Then, the issuers called 'em when they could but I had a small tranche of zero coupons ... those were fun.

Of course, I couldn't get raped in the tech bubble or Enron or LTCm but that's opportunity cost.  :-)

 

Wed, 09/08/2010 - 22:21 | 570906 tom a taxpayer
tom a taxpayer's picture

Thanks. Good read. Lots of good information and insights.

Thu, 09/09/2010 - 02:09 | 571159 Eternal Student
Eternal Student's picture

One of the best reads that I've seen lately. And that's saying something.

Thu, 09/09/2010 - 11:00 | 571790 Pope Clement
Pope Clement's picture

moronic query cancelled...

Wed, 09/08/2010 - 22:22 | 570908 Modern Money Me...
Modern Money Mechanics's picture
Letter Re: FDIC Insider in Illinois Reports Diminishing Bank Merger Possibilities

Mr. Rawles,
A close personal friend of mine is a FDIC bank auditor in Illinois. This person gives the final word on whether they will close a bank or not, to put it in simple terms. I'm sorry I cannot provide you with any more credible source other than my word which is based upon our conversations, but I feel it important to share this information with you and with the readers here.

A little background: Most failed banks are essentially sold to other banks and some go into receivership. The common maneuver here is to transfer the assets and liabilities to another bank with some level of guarantee from the FDIC to help support those liabilities. This is [typically] done on a Friday evening and causes the bank to be closed perhaps the next day (Saturday) and then the bank re-opens, business as usual, on Monday. So far, there has been little panic or problems with this [modus operandi].

Now, I can't speak for what is happening around the U.S. but my friend states that in Illinois, they are finding it more and more difficult to find banks that want to help out. That is, the banks that formerly had wanted to purchase other banks have done so and are not interested in buying any more banks. To put it bluntly, the FDIC is running out of buyers. My friend states that often times they are literally coming down to the wire to get all the transactions and contracts, etc. pertaining to the purchase completed in time to seamlessly make the transition, as it is taking longer and longer to secure a buyer.

I'm not quite certain what to make of this other than it's quite obvious that we've reached a saturation point in the banking industry where they themselves can no longer purchase any more failed banks.

So how else can this information benefit the readers? I believe that we should keep an eye out for more banks going into receivership or being absorbed by the Federal Government versus being purchased by other banks. We should also watch for any prolonged transitions of one bank closing and not opening back up under a new bank for more than a couple days. These subtle indicators may be one of those much sought after cues for knowing when to put some plans into action.

Thank you for all you do. Sincerely, - Tanker

http://www.survivalblog.com/2010/09/letter_re_fdic_insider_in_illi.html

Wed, 09/08/2010 - 22:29 | 570918 liberal sodomy
liberal sodomy's picture

Got Gold?

Wed, 09/08/2010 - 22:50 | 570940 DoChenRollingBearing
DoChenRollingBearing's picture

That was a very interesting paper Tyler.  I only know a little bit about the overall markets compared to many here, but I am familiar enough with themes raised in the ACM paper.  I hope that ZH and ACM can continue to publish such research, even though I can only barely understand it.

There are very useful comments on HFT and how using conventional probability theory has failed those who built models.

So, 60% - 70% of stock trading is done by the 'bots?  Self-similarity?

I have been a net seller for 15 years, doing my best to keep my family's wealth intact.  Buying stocks now?  No way, sold some a month ago (winners, will pay the relatively low cap gains this year).  LOSERS I will sell in the future.

I have moved A LOT into cash and Gold.  And our bearing business in Peru.

Bearings Bitchez!

Wed, 09/08/2010 - 23:45 | 571006 Rusty Shorts
Rusty Shorts's picture

I like the way you think.

Wed, 09/08/2010 - 22:59 | 570954 gookempucky
gookempucky's picture

Thanks TD for this report---one cannot leave out another 597,000 reasons that if any one of those go ??

For anyone who wants to understand the military matrix and it's giant sucking sound -look no farther than this.

http://www.acq.osd.mil/ie/download/bsr/BSR2009Baseline.pdf

Many thanks to ZH and their hard work.

Wed, 09/08/2010 - 23:47 | 571013 THE 4th Quadrant
THE 4th Quadrant's picture

lolz, i don't know about you but i ain't clicking that dude. darpanet honeypot.

Wed, 09/08/2010 - 23:43 | 570992 sbenard
sbenard's picture

How about setting up an agreement with Hoisington Capital Management to post their quarterly market forecasts, too?

 

I've enjoyed your posts by Gordon Long and his "tipping point" articles. And I may have also seen John Hussman's articles here too.

 

This is THE best economics and finance blog. PERIOD!! Congratulations on a job well done!

Wed, 09/08/2010 - 23:41 | 570997 THE 4th Quadrant
THE 4th Quadrant's picture

Grow forward and Prosper.

Thu, 09/09/2010 - 00:49 | 571097 VeloSpade
VeloSpade's picture

Farts and wet dreams bitchez.

Thu, 09/09/2010 - 01:13 | 571123 DoChenRollingBearing
DoChenRollingBearing's picture

Farts have a lot (relatively) of H2S (Hydrogen Sulfide, a very toxic gas), and so fart smells should be avoided...

Have not had a wet dream in ages, as my lovely Peruvian wife (almost 62 yrs old, but HOT at least for me) keeps me from that fate...

Thu, 09/09/2010 - 06:08 | 571305 jeff montanye
jeff montanye's picture

very good article, particularly on the burstiness.  but "irregardless" on page 17?

Thu, 09/09/2010 - 06:24 | 571310 jeff montanye
jeff montanye's picture

another point re: september.  that month in 1930 was no picnic for bulls after 9-11.  also october.

Thu, 09/09/2010 - 10:23 | 571736 AnonymousMonetarist
AnonymousMonetarist's picture

Well, Part 2 on self-similarity is of considerable interest to this fella. However ,the author's treatment of it, 'burstiness' and the 'sand pile' is extremely rudimentary and not especially illuminating.

The markets are indeed fractal based, randomwalking (the ex-theory) suggests that the last 50 discontinuous movements this century each had odds of  at least 1 in 300,000 of occurring.

Most 'technical' theories be they astro, cosmo, fib, demark or Gann, are correct insofar as they are illuminated shapes. But they all fall short of the perfect form.

To say how the markets work is  'big game' and one might suppose that if a fella stumbled across it he would broadcast it for personal gain and glory.

However there is an 'aspect' in being handed the 'keys' ,as it were, that it a bit too esoteric to be readily explained...

There are some hints here:

http://www.google.com/search?hl=en&as_q=&as_epq=fractal&as_oq=&as_eq=&nu...

for those among you that are 'seekers'. Not as fleshed out as it could be, but there are constraints...

One last thought.. we are all complicated, sophisticated, folks and as such if we assume that the markets are the dataset of humanity then most certainly market theory need reflect our complexity...

But fractals are self-similar on all scales, it is as easy as putting a square peg in a square hole or a round peg in a round hole...

It is ,counter-intuitively, hiding in plain sight and available to anyone that has eyes to see and ears to hear.

Best to you.

 

 

 

 

Thu, 09/09/2010 - 10:30 | 571753 RandomRick
RandomRick's picture

"burstiness" ...wondering if they used a Dirichlet distribution to model that.

Thu, 09/09/2010 - 10:57 | 571799 sheeple
sheeple's picture

Thanks for the post

Thu, 09/09/2010 - 12:56 | 572070 Grand Supercycle
Tue, 09/28/2010 - 03:41 | 609353 Herry12
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